Buying a house advice.

Haversham77

Hi All,

Very new to all this so please be kind.

Currently my partner and I rent. Our Landlady is selling the house and we are buying it. She has accepted an offer from us.

But Our complication is, she will not directly sell to us. Because she signed a contract with the letting agent, saying that if she sold to the tenant, she would pay them 2.5% (about £7500 inc Vat) she is only selling to us under the assumption that my parents are the ones buying and we will purchase from them at a later date.

But this adds complications and may be more expensive in the long run as we will have pay all the solicitor fees again.

My parents own another Rental property which they are selling to lend us some money for a deposit, So would prefer to buy ourselves.

Can anyone recommend any ways around this or if it will be cheaper to offer her more money now?

Open any other options!

Thanks in advance
Jo

ACG

Why not give your notice, move out and then move back in again the next day. New contract, new tenancy agreement without the letting agents?

I have no idea if that would stand up in court but it could be a way around it.

If the landlord does not pay that fee then effectively you would end up paying a large chunk of it indirectly in legal costs, valuation costs and possibly stamp duty.

andrewmp

Unless she's selling it to you at below market rate. Tell her that you're not willing to jump through her hoops.

She'd be mad to turn you down, no chain etc, rather than market it, risk a chain, and have to pay a fee to an estate agent anyway.

Haversham77

ACG wrote: »

Why not give your notice, move out and then move back in again the next day. New contract, new tenancy agreement without the letting agents?

I have no idea if that would stand up in court but it could be a way around it.

If the landlord does not pay that fee then effectively you would end up paying a large chunk of it indirectly in legal costs, valuation costs and possibly stamp duty.

Unfortunately she would still be tied in as the contract states "within 12 months of the contract ending" Good plan othewise.

Thanks

Haversham77

andrewmp wrote: »

Unless she's selling it to you at below market rate. Tell her that you're not willing to jump through her hoops.

She'd be mad to turn you down, no chain etc, rather than market it, risk a chain, and have to pay a fee to an estate agent anyway.

I totally agree, we dont want to jump though hoops for her, but she is incredibly difficult and hard to haggle with. She originally offered to us at £255,000 but has accepted at £245,000. The house has been valued between £230K - £250k but she has already been hard enough to convince that she accepts less that her original offer. Unfortunately the house is pretty much perfect so we don't want to lose it.

Thanks

El_Torro

Buying it off your parents will probably cost you more than 2.5% anyway so you're better off telling her to pay the letting agent's fee. Depending on how much you want the house you might want to offer to up the price to cover some / all of the fee.

David_White

Sounds like your Landlady's problem, not yours.

The situation is asking for trouble.

David_White

Wait... the property has been valued at "between £230K - £250k" but she's graciously accepted £245k from you??

You'd be happy to buy a house for £245k even though it might only be worth £230k?

Haversham77

£230K in a bad Market, It would be going up for £255K if she was to market it, and would easily get offers of £245k.

And totally agree, It is her problem, But dont want it become my problem if she pulls out.

Also, Does anyone know, if my parents are to gift us a deposit, would they/we have to pay tax?

Thanks All

pjcox2005

Hi,


No tax on the gift from parents, but potentially could be an issue for Inheritance tax if they died within 7 years.


Also a potential impact on any mortgage re gifted deposits.


I guess looking at it, if your parents buy and then sell to you, then I think you'd have additional stamp duty of £2,400, and another set of legal fees, presumably £1,000 ish but potentially double if it did require same work as normal for mortgage purposes i.e. buyer and seller fees.


So you'd incur c.£3,500 of costs.


If sale fell through the landlady would presumably look to use an estate agent, so typical percentage would be 1.5% so fees of £3,675 to her. So all in, it's a fairly similar position.


Feels like negotiation on perhaps paying half is the way to go.

libf

Offer to go halves on the letting agent fee if the LL will sell direct to you. You'll end up paying that in legals/stamp duty/etc anyway when you buy from your parents.

They don't pay tax on the gift, but there might be inheritance tax issues if they should pass on within 7 years of the gift.